When should you use a recruiter for an exec hire, and when should you do it yourself??
Lots of options to consider as you augment your team
A potential client got in touch recently to share he was going to confidentially be running a search for a Chief Marketing Officer. The incumbent was fine, he said, but didn't know how to scale and didn't have the pedigree. Great, I told him, let's talk.
But then he went quiet. For a friggin month.
I unfortunately had to bug him before he finally got back to me saying that he has been running the search himself - without much luck.
Now, this guy is a veteran with a Rolodex of trusted colleagues thicker than stacks on stacks on stacks. But, he is also a CEO who has to do CEO-type things. So while its unfortunate for him that his network hasn't panned out, it does beg the question about when to dish out $$ for a recruiter vs. own the process yourself.
Doin it Yourself (Read in Doin it Right by Daft Punk plz)
A CEO recruiting a CMO for a 10 person company is different than a 50 or 100 or 1000 employee company. More employees = more stuff to deal with on a daily basis, and also more execs that should be part of the interview process for that candidate. You certainly don't want to just hire your own peeps without putting them through a fair interview process.
But, if you want to hire someone yourself, cost savings of not using a recruiter probably shouldn't be part of your decision-making process. Say you pay 30k for a recruiter, who lands you a CMO who costs 250k. But that CMO drives $2m of revenue in 3 years' time. At that point, you won't care if the recruiter fee was 30k or 60k. So you need to isolate that factor when making this decision. Further, the cost of the % of time you and your employees time is spent on sourcing and interviewing candidates on your own should be factored in. What is the dollar value of you and your employees putting time in to source a CMO on your own?
The decision should come down to time, knowledge, and patience. Ask yourself these questions:
Do you have 3-6 months' time to commit to this search each and every day?
Do you confidently know the candidate market? Do you know how to reach people? How to research if they are right? What trends are showing in the market? You should be uber critical about the strength of your network. Has your network ever helped you with something like this in the past?
How would you handle a candidate who turns down your offer? Would you panic, knowing there wasn't a bench behind it? Or would you be able to withstand it and quickly refocus the search on new candidates?
Hiring a recruiter (Trying to remove the bias as I type this…)
This is tough because you have to know what kind of recruiter you want to hire. The first question comes down to wanting to hire a contingent or retained recruiter. Contingent is defined as that recruiter only gets paid when you hire someone; retained defined as the recruiter gets part of the fee just for doing the work.
Once you have that figured out, you determine if you want a boutique firm or a large firm. Large firms have the who's-who of client list. As a result, they may also have a strict and large "off-limits" list - aka, companies they are legally banned from recruiting out of, potentially limiting the candidate pool. They also have teams of 2-5 people who will run a search, ensuring the proper resources are allocated to getting it done quickly. On the other hand, it can be difficult to hold 1 individual person accountable vs "the firm", if things go south.
The boutique firms might have a ton of expertise in a certain market, but they have limited bandwidth. They can only take so many clients on at once. However, their payment terms might be more flexible and customizable than the stodgy old search firms'. This could become important if you run the search in conjunction with a boutique firm and source a candidate on your own. You're more likely to save cost with a boutique than with a large firm, given their fairly rigid fee structures.
….net-net…
You gotta peer in that looking glass and ask yourself if you have the energy to run a thorough search for the best possible candidate yourself. Then, you, Mrs. CEO, need to figure out what is best for your business in the long run. Don't fret about a few thousand dollars of fees right now; look at hiring a recruiter as a long-term investment that will 10x your business.